Two in Five Parents Would Spend More on a New Home Near a Top School

Two in Five Parents Would Spend More on a New Home Near a Top School 
School league tables and Ofsted reports influence parental decisions 
LONDON, UNITED KINGDOM -- (Marketwired) -- 10/09/13 -- With
competition for places in the most popular schools increasing(i), new
research(1) from Nationwide Building Society shows that nearly a
quarter (23 per cent) of UK parents of children aged 5 to 16 years
would move and be prepared to pay between two and 10 per cent extra
on the price of their new home to be in the catchment area of a
better school. Nearly one in ten (eight per cent) would be prepared
to pay more than 10 per cent extra for their house and eight per cent
would pay anywhere up to an additional two per cent. 
With the typical UK home currently worth GBP 172,127(2), this could
lead to a substantial monetary outlay for parents at a time when
household finances are already being squeezed. For example, parents
willing to pay two per cent more would need to find nearly GBP 3,500
extra. Anyone prepared to pay 10 per cent more would add an
additional GBP 17,213 to the cost of their new home. 

             Price of typical UK home: GBP 172,127(2)            
% increase                    New house price      School premium
2 per cent increase               GBP 175,570           GBP 3,443
5 per cent increase               GBP 180,733           GBP 8,606
10 per cent increase              GBP 189,340          GBP 17,213
12 per cent increase              GBP 192,782          GBP 20,655
15 per cent increase              GBP 197,946          GBP 25,819
20 per cent increase              GBP 206,552          GBP 34,425

Mortgage considerations(ii) 
The additional cost of the house will also have implications on the
cost of the mortgage. Paying an additional 10 per cent on the cost of
a typical UK home (GBP 172,127(2)) would mean buying a house worth
GBP 189,340. 
Based on a 15 per cent deposit, a house worth an additional 10 per
cent would require an extra GBP 2,582 deposit and, if for example,
Nationwide's five-year Flexclusive tracker mortgage(iii) was taken
out, would also mean an extra GBP 76.75 per month in mortgage
repayments. So, in the course of the first year, parents would need
to find an additional GBP 3,503 and, over a five-year period, it
would cost GBP 7,187 extra. 
Parents are already making house purchase choices based on schools.
Our research shows that nearly one in five of parents (18 per cent)
admit that a school league table or school Ofsted rating has
influenced where they chose to live. 
Richard Napier, Nationwide's divisional director for savings and
mortgages, comments: 
"Choosing the right school for your child is possibly one of the most
important decisions a parent will make and it appears league tables
and Ofsted reports play a significant part in that decision. 
"Competition for places at the UK's best schools continues to
increase and, although household finances remain stretched, it is
significant that a number of parents are willing to pay more on the
price of a new home to ensure their child goes to a good school. 
"Taking the cost of a typical UK home, any parent willing to pay 10
per cent more would need to find an additional GBP 17,000 on the
total cost of the house, which is a lot of money in the current
climate. And, this is before you factor in the cost of items such as
uniform, P.E. kit, lunch and even travel to and from school. 
"And with the additional monthly repayment on Nationwide's five-year
Flexclusive tracker mortgage(iii) being an additional GBP 76.75, it
may well be a premium parents think is worth paying." 
Notes to editors: 
(1) All figures, unless otherwise stated, are from YouGov plc. Total
sample size was 1,012 UK parents of children aged 5-16 years whose
child will be attending school in the next academic year. Fieldwork
was undertaken between 7th - 13th August 2013. The survey was carried
out online. 
(2) Source: Nationwide September House Price Index http://www.nationw
(ii) Deposit calculations 
15% deposit on GBP 172,127 = GBP 25,819 
15% deposit on GBP 189,340 = GBP 28,401 
Deposit difference: GBP 2,582 
(ii) Monthly repayment calculations 
Property value: GBP 172,127 / Loan: GBP 146,308 / Term: 25 years /
Mortgage: 5 year Flexclusive Tracker (Rate used: 3.94%) 
Monthly repayment: GBP 767.42 
Property value: GBP 189,340 / Loan: GBP 160,939 / Term: 25 years /
Mortgage: 5 year Flexclusive Tracker (Rate used: 3.94%) 
Monthly repayment: GBP 844.17 
Monthly payment difference: GBP 76.75 
(iii) The mortgage product and monthly payments shown above are for
illustration purposes only. They are based on a new customer moving
house, the initial rate during the deal period and on a capital and
interest repayment method. They do not take into account any fees or
charges payable for changing the mortgage, or the applicable interest
rate when the mortgage deal ends. 
To get access to our range of Flexclusive offers you must either: 

1.  Hold a FlexAccount with a Visa debit card (not cash card or cash card+)
    --  Have been paying in GBP 750+ a month (excluding internal transfers)
        for the last 3 months; or 
    --  Complete an account switch to us (from a non-Nationwide account)
        using our Current Account Switch Team or have done so in the last 4
        months; or
2.  Hold a FlexDirect or FlexPlus account.

About Nationwide Building Society 
Nationwide is the world's largest building society as well as the
second largest savings provider and a top-three provider of mortgages
in the UK. It is also a major provider of current accounts, credit
cards, ISAs and personal loans. Nationwide has around 15 million
Customers can manage their finances in a branch, on the telephone,
internet and post. The Society has around 15,000 employees.
Nationwide's head office is in Swindon with administration centres
based in Northampton, Bournemouth and Dunfermline. The Society also
has a number of call centres across the UK. 
Find recent press releases and photos at the Nationwide Media Centre: 
Twitter: @NationwidePress 
Media information:
Mike Pitcher
01793 657225 
Paul Beadle
01793 655189
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